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published in Blogs
Aug 19, 2022
Target (TGT, $167.47) earnings drop -90%

Target (TGT, $167.47) earnings drop -90%

Target posted its second quarter earnings that plunged almost -90%, while missing analysts' expectations.

The retail giant’s earnings for the quarter came in at $0.39 a share, vs. $3.65 a share a year ago. The figure is also well below FactSet's consensus estimate of $0.79 a share.

Revenue of $26.04 billion, up from $25.16 billion a year earlier. Analysts expected $26.03 billion.

Gross margin narrowed to 21.5% from 30.4% a year ago, in part reflecting higher markdown rates mainly due to inventory impairments and actions to deal with lower-than-expected sales in discretionary categories, and higher shipping costs.

The company’s inventory was $15.32 billion in the second quarter, rising from $15.08 billion in the first quarter and $11.26 billion in the year-ago quarter. "While these inventory actions put significant pressure on our near-term profitability, we're confident this was the right long-term decision in support of our guests, our team and our business," Brian Cornell, Target's chairman and CEO, mentioned. In June, TTarget had cautioned that  its profitability would be impacted due to its plans to lower prices in order to sell unwanted inventory.

Target projects  full-year revenue growth in the low- to mid-single digit range. It is expecting operating margin rate in a range of around 6% in the second half of 2022.

Related Tickers: TGT